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Given enough time, all that’s old becomes new again.

Case in point: The marketplace for private equity seems poised to return to the freewheeling late 1990s, where investing in innovation and intellectual capital were all the rage. Pundits are forecasting a wave of technology buyouts in the coming year as PE groups get opportunistic about putting dry powder to work.

But why return to tech? – it’s not exactly an area that treated private equity well the first go round.

This time, though, some see ready-made buyout candidates that with no building of value during the investment could still yield respectable IRRs.

The deals have already started coming, with some involving seasoned tech investors pursuing control of their investment, and others involving buyout focused groups dipping a toe into Internet water.

Still others have firms taking venture-like minority stakes in well-established Internet companies – ones that sport impressive user metrics and real revenue. In other instances, firms are even starting to look at companies they’re acquainted with from earlier deals.

But tech interest could be short-lived for private equity, as competition from strategics and PE interest itself already seems to be driving prices up, and suspicions grow that the real money is to be made in very early stage investing.

For a digest of today’s top dealmaking news, please check out the DealMaker Digest.

It’s either a case of short-term memory or enthusiastic opportunism, but auto deals look like they’re coming back with a bang for private equity.

Still in the wake of the blowup of Cerberus’ investment in Chrysler – and its more tangentially related investment and subsequent unravelling of auto financing business GMAC Inc., now Ally Financial Inc. – one would think private equity’s feet would be too cold to get back on the accelerator.

It’s evidently not the case. PE executives aren’t quite as enamored of car culture as the subjects of the “The Kandy-Kolored Tangerine-Flake Streamline Baby”, but there’s definitely more than just tire kicking going on.

On the mega-end of the market, Onex and Canada Pension Board are finalizing the debt package for their $4.5 billion acquisition of London’s Tomkins plc, which makes car belts and hoses among other things.

In Europe, divestitures from a pair of large auto parts businesses are likely to find their way into the hands of PE buyers, while Wilbur Ross is trawling for automotive deals in Asia to help build out one of his platform investments.

Some groups are simultaneously exiting and entering automotive portfolio companies – leaving one to wonder whether they’ve figured out a way to both buy low and sell high at the same time in the same industry.

And it’s likely not just parts companies that will receive interest from private equity, as service businesses related to the automotive industry are also considering their options.

But before PE execs get too gassed up on auto deals, they should wait to see whether investors currently in the driver’s seat of the industry are able to safely exit those investments.

For a digest of today’s top dealmaking news, please check out the DealMaker Digest.

The summer’s done, kids are going back to school and it seems that Private Equity – firms, LPs and the rest of the usual cast of characters – has returned ready to roll up its sleeves and make some tough choices (or risk having those choices made for it).

In some cases, the concessions private equity is contemplating are relatively mild. Just a small bit of wavering to help a firm get over the fund-raising hump in a difficult environment. In others, firms are asking their investors to make concessions to help them through difficult times – and these conversations have gone better for some than it has for others.

And conversations between LPs and GPs don’t just involve the future of the firm or its next fund: sometimes LPs are opening the books on past funds and demanding what’s coming to them from earlier commitments. In the more extreme cases, LPs themselves are actually making tough choices for their general partners.

But it’s more than just LP-GP conversations today that involve concessions. Firms are deciding that parts of the M&A market that weren’t all that important a few short years ago, merit far more attention today under the shadow of a serious capital overhang. Companies, in some cases, are making the tough decision to forego the public market today in favor of investment by private equity (even if that choice won’t necessarily lead to a public windfall in the future).

These decisions at the institutional-level are trickling down to the professionals that make the industry work, with a few well known executives making some pretty major career moves.

But perhaps the most surprising concession that we’ve seen in the fall is that some of Private Equity’s Masters of the Universe are admitting that they’re fallible.

For a digest of today’s top dealmaking news, please check out the DealMaker Digest.

We all know that politics makes for strange bedfellows, but the degree to which venture capital is making its way into the political spectrum today is a bit alarming.

Sure, maybe there’s a perceived quid pro quo after VCs dodged a regulatory bullet. Or maybe the lack of exits and LP love, and the tough economic climate is making venture capitalists feel like Washington’s grass is a whole lot greener than their own.

This would all make sense if it were the VCs rushing for shelter under the growing political awning – and in some cases, surely, it is.

But more often it appears that the opposite is true. Politicians are – gasp – going out of their way to align themselves with the venture capital community. What would cause our political leaders to offer an olive branch to their former enemies (especially ones with such an interest in reinforcing the status quo)?

The more cynical among us would point toward political expediency – venture investment in some cases represents the last wildcard for endangered leaders. A sort of whistling past the graveyard of the November elections.

But in other cases, it seems that governmental belief in salvation through venture investing is truly heartfelt. So much so that universities, developing nations, even U.S. government itself (indirectly) all appear to be pinning their hopes on it.

But the truth is, it’s probably just a simple case of empathy. Now that government has had a chance to examine its venture brethren more closely, it’s realizing that they both face a similar future.

For a digest of today’s top dealmaking news, please check out the DealMaker Digest.

Private equity today is looking a lot like that first car we all used to have – remember that one, that on some days purred like a kitten, but was guaranteed to give out on you right when you needed it?

In some ways, the private equity industry is once again starting to behave like the pimped out, luxury sedan we remember from a few years ago.

Some big deals are getting inked by buyout firms – both private and public (and even some not-so-big public-to-privates look likely to happen. The public market’s beginning to buzz once again to view private equity as an opportunity rather than a liability. And fund-raising looks like it’s picking up – if only selectively.

But just when you’re getting ready for a night on the town, that’s when the knocking begins, the Bondo starts to crack, and the jalopy within is once again exposed.

The rediscovered public dreams of private equity groups are faltering again. While there is newfound deal flow coming through, it’s still surrounded by instances of buyout firms swapping companies with other buyout firms (some of which are in distress themselves), or private equity groups cleaning up after the financial crisis.

Meantime, selective is definitely the word to describe today’s fund-raising market, as name-brand mega-groups continue to miss targets.

But maybe the biggest proof that private equity still needs some work under the hood is that parts just keep falling off.

For a digest of today’s top dealmaking news, please check out the DealMaker Digest.

Okay, so no one’s going to argue that it’s not still great to be a senior partner at a mega-buyout firm, even with all the government meddling, angry or indifferent LPs, high purchase price multiples and limited exit opportunities.

After all, the worst case scenarios that were kicked around just a few short years ago – scary ones like chain reaction portfolio company implosions, lenders not willing to be seen in public with you let alone return your calls, or investors abandoning the asset class completely – never really came to pass. And you’ve still got more money than anyone without an Ivy League MBA would know what to do with, are on the guest list for all the right parties and charitable boards, and (most of) you haven’t been deposed in front of Congress.

Still, it does seem like a bit of the bloom has come off the rose. Rich in today’s mega-buyout circles isn’t quite what rich was a few short years ago (even the lawyers seem to be feeling the pinch). The sparkling reputations of the top firms have started to get just a wee bit tarnished. The little guys you used to laugh at not too long ago are walking a whole lot taller. You just don’t feel as invincible as maybe you did a couple years back.

It’s enough to make anyone feel just a wee bit hostile.

For a digest of today’s top dealmaking news, please check out the DealMaker Digest.

The VC space is starting to look a lot like our world, with a relatively small number of Haves, surrounded by way more Have Nots just trying to get by.

To be sure, the venture game has always been based on a small number of winners that do exceptionally well – both in deals and funds – surrounded by the masses that don’t quite get it right. Today, though, it’s looking even more acute than in the past.

With deal size creeping upward, the IPO window starting to shed some light on possible exits, and a handful of funds surpassing their targets with ease, one can be forgiven for thinking that the average VC is living on Easy Street (right next door to the entrepreneurs that are getting catered to with new financing sources, lower operating costs, and a host of eager Angel investors looking to invest in their companies).

But a closer look reveals the ugly truth … Larger deal sizes seem to be just a reflection of VCs trying to make safer bets and be less adventurous (even if that doesn’t actually work out). And more money doesn’t necessarily equate to more deals getting done.

The opening of the IPO window shows just how painted shut it had been over the past two years – and how much of a backlog has built up. The fundraising winners, rather than representing a bellwether, actually point to just how difficult it is for VCs to extract any money out of LPs – and that’s in turn having an impact on personnel.

And even in a time of low costs for startups, some regions still seem to be hurting for entrepreneurial zeal.

For a digest of today’s top dealmaking news, please check out the DealMaker Digest.

You can forgive an observer for being tempted to think it’s both the best of times and the worst of times for private equity.

On one hand, the IPO market has finally started to open up for PE-backed portfolio companies. Buyout dealflow has begun to improve, and auctions are starting to happen for more than just foreclosed homes.

At the same time, PE firms are still taking their lumps from the ill timed buyout binge of ‘05 through ‘06, Congress has all but signed on the dotted line for treating carried interest as ordinary income (and Europe is likely to follow suit) – and no one outside the industry seems to care.
Meantime, in spite of an improving debt market, sellers and lenders are still reluctant to cooperate with the big bad general partners, and there might be good reason for caution, given that the shoe related to buyout backed debt over the last several years has likely yet to drop.

Perhaps most insulting, the long valued “private” part of private equity seems poised to slip away as well, as buyout firms and their brethren become just one more form of broker dealer.

So is private equity really at a crossroads, with one hand extended to the heavens and one foot dangling over the abyss? Perhaps, but in reality it’s nothing new for an industry that has reinvented itself numerous times throughout a relatively short history, moving from boom to bust and back to boom again in cycles of just a few short years. Indeed, while the issues the industry is grappling with today are new, the challenges are similar to the ones that have always been there and, of course, the faces are pretty familiar too. It’s all just part of the private equity enigma.